NOTE 4 – STOCK-BASED COMPENSATION

There were no options granted or issued during the three-month period ended March 31, 2020.

During the three-month period ended March 31, 2019, the Company granted 8,000 options to non-executives. The exercise price of these options is $8.55 per option and will expire in February 2029. Further, one third of these options vest on the anniversary date of the grant for the next three years.

The Company estimated the fair value of these options using the following assumptions:


Risk-free interest rate		2.73	%
Expected term (in years)		10 years
Volatility		62.08	%
Dividend yield		2.34	%
Weighted average fair value of options granted	$	4.60

The following is a summary of the changes in outstanding options during the three-month period ended March 31, 2020:


		Weighted		Weighted Average
		Average		Remaining	Aggregate
		Exercise		Contractual Life	Intrinsic
	Option Shares	Price		(Years)	Value
Outstanding, January 1, 2020	226,075	$	6.30	4.7	$	219,983
Granted	—
Exercised	(1,000)		2.92
Forfeited	—		—
Expired	—		—
Outstanding, March 31, 2020	225,075	$	6.32	4.5	$	30,036
Vested, March 31, 2020	190,075	$	6.14	3.9	$	30,036


		Weighted
		Average Grant-
	Option Shares	Date Fair Value
Non-vested options, January 1, 2020	37,666	$	4.45
Granted
Vested	(2,666)		4.60
Forfeited	—
Non-vested options, March 31, 2020	35,000	$	4.44

The remaining number of shares of Common Stock available for issuance under the P&F Industries, Inc. 2012 Stock Incentive Plan (the “2012 Plan”) as of March 31, 2020 was 62,062. At March 31, 2020, there were 190,575 options outstanding issued under the 2012 Plan and 34,500 options outstanding issued under the 2002 Stock Incentive Plan.

Restricted Stock

On May 22, 2019, the Company granted 1,250 restricted shares of its Common Stock to each non-employee member of its Board of Directors, totaling 6,250 restricted shares. The Company determined that the fair value of these shares was $8.31 per share, which was the closing price of the Company's Common Stock on the date of the grant. These shares cannot be traded earlier than the first anniversary of the grant date. The Company will ratably amortize the total non-cash compensation expense of approximately $52,000 to selling, general and administrative expenses through May 2020.

Treasury Stock

On February 14, 2019, the Company entered into an agreement to repurchase 389,909 shares of its common stock from certain funds and accounts advised or sub-advised by Fidelity Management & Research Company or one of its affiliates in a privately negotiated transaction at approximately $7.62 per share for a total purchase price of $2,971,000. On February 15, 2019, the Company completed this transaction. On February 14, 2019, the Company entered into Amendment No. 6 to the Second Amended and Restated Loan and Security Agreement with Capital One, which permitted the Company to complete the above transaction.